The energy and utilities sector will continue to evolve at a rapid pace — and so will the underlying technology used to support energy production. To avoid accumulating more technical debt, many organizations are considering modernization projects such as migrating to the cloud to help prioritize workloads and reduce reliability and support issues. However, it can be difficult to understand where to begin the process or how to achieve this safely while minimizing disruptions.
MNP Digital has helped many organizations transition from on-premises software to hybrid and cloud-based platforms. In our experience, moving to the cloud has many factors you need to consider to achieve a successful migration. Let’s discuss the benefits of moving to the cloud, the risks you may face during a cloud migration, and how to overcome these obstacles.
What are the benefits of cloud adoption?
Many Canadian energy and utilities organizations are still running on-premises and legacy infrastructure. However, this infrastructure requires frequent maintenance and upgrades, as well as significant ongoing investments in hardware, physical space, and team resourcing. This may not provide the agility or stability your organization needs to reliably produce energy and adapt to a changing sector.
Migrating to the cloud can help your company respond rapidly to change, improve the resilience and security posture of your organization, and increase opportunities for innovation. Forty-four percent of the North American Energy members have some cloud resources, and your company risks falling behind if it does not invest in this new technology.
These are some of the benefits that a cloud migration can provide to your energy and utilities company:
- Predictive cost model — Cloud platforms offer a subscription-based model, which reduces unpredictable IT infrastructure investments and operational expenses.
- Usage-based pricing — Similar to time-of-use pricing, your company will only pay for the cloud resources it uses and is able to control when those workloads are used. This allows you to scale up or down based on demand and ensures cost efficiency.
- Improved resilience — Cloud environments provide more system redundancy and automatic failover without the need for extra hardware or datacenters. This helps ensure uptime and minimizes the risk of outages.
- Auto-scaling and provisioning — The cloud automatically adjusts resources based on demand, which enables it to handle peak loads without over-provisioning infrastructure. This enables your company to simply scale up when needed, instead of guessing how much demand you will face in the future.
- Improved data management and analytics — Cloud solutions have robust tools to support data collection, storage, and analytics. This enables your company to consolidate its many data-generating workloads into a single source of truth that supports informed decision-making.
- Increased opportunity for innovation — The cloud provides access to new technologies such as artificial intelligence and machine learning, which allows companies to foster innovation, enhance operational efficiency, and improve the customer experience. Proof-of-value, proof-of-concept, or simple test cases can all be provisioned quickly and de-provisioned just as quickly with no lingering costs.
- Regulatory incentives — Governments and regulatory bodies may provide incentives for energy and utilities companies to adopt cloud technology that supports environmental goals such as reducing carbon footprints.
- Advanced threat protection — Cloud providers invest heavily in the security of these platforms and offer effective threat detection and mitigation tools. The cloud tools used to defend against cyber threats also continue to evolve as the threat landscape continues to change.
What risks are associated with migrating to the cloud without a plan?
Moving to the cloud can help your company increase productivity and enhance innovation. However, transitioning to the cloud also includes several mitigatable risks. It is crucial to understand each of these risks and how to address them to achieve a successful migration.
Poorly provisioned foundation
It is vital to ensure your cloud landing zone is properly designed and provisioned. This helps ensure that your company’s infrastructure is scalable, secure, and aligns with cloud best practices. A poorly provisioned foundation can cause performance issues, security vulnerabilities, and inefficiencies.
Improperly configured services
Ensure that your cloud services meet industry standards and regulatory requirements. Improperly configured cloud services can result in operational failures, data breaches, or security risks.
Misalignment with business goals
Your cloud architecture and tools must support your company’s long-term goals and business objectives — such as cost efficiency or innovation. Migrating to the cloud without ensuring this alignment can cause your company to waste its resources and miss opportunities.
Lack of governance and policy management
An effective governance structure helps ensure that the migration process follows compliance, security, and operational policies. Inconsistent practices, security gaps, and noncompliance with regulatory requirements all occur without a strong governance framework in place.
Missing operational processes
It is necessary to ensure operational policies such as monitoring, logging, and incident response are adapted for the new cloud environment. Transitioning to the cloud without these processes in place can cause operational blind spots, which makes it more difficult to detect and respond to incidents quickly.
Siloed governance requirements
Siloed governance requirements can create inconsistent security, compliance, and operational practices across your organization. It is important to establish a unified governance model spanning all departments to ensure your cloud infrastructure is cohesive and secure.
Lack of workload or service accountability
It can be unclear who is responsible for managing, securing, and optimizing different parts of your cloud infrastructure without clearly defined accountability for workloads and services. This may create inefficiencies, gaps, or operational risks.
How to overcome cloud migration obstacles
Moving to the cloud can provide your organization with many benefits — however, it also carries significant risks. These five steps can help you overcome obstacles to achieve a successful migration:
- Develop a cloud strategy
- Infrastructure — This pillar helps ensure that your company’s operational needs are supported by scalable, resilient, and cost-effective resources. It should include planning for the compute, storage, and networking needs of critical energy and utilities systems while also considering disaster recovery, high availability, and auto-scaling.
- Data — Energy and utilities companies generate large volumes of data, which makes it crucial to manage this data effectively. Planning for data migration, security, storage, governance, and analytics helps ensure your company can leverage cloud technologies to optimize its performance, improve decision-making, and prevent data mismanagement.
- Security — A strong security strategy should follow the principles of least privilege and zero trust, include threat detection and response capabilities, and address protecting data at rest and in transit. It must also provide guidance on keeping up to date with security patches, and leverage ongoing security alerting and monitoring. This is vital to both protect critical energy and utilities infrastructure and sensitive data from cyber threats and to comply with regulatory requirements.
- Create a risk mitigation framework
- Assess — Conduct a thorough risk assessment in this phase to understand the current state of your infrastructure, data, and security. This involves identifying business objectives, regulatory requirements, and potential vulnerabilities. It also includes reviewing cloud service providers, defining the criteria for success, and developing a migration roadmap.
- Implement — Risk management during the implementation phase involves following a structured approach to provisioning cloud resources, configuring security controls, and ensuring alignment with regulations. Additionally, continuous testing and validation during the migration can help identify and address issues early to minimize downtime and support a smooth transition.
- Operate — Cloud operations require ongoing monitoring, optimization, and risk management after the transition. This includes setting up and evolving operational processes, updating security controls, and reviewing governance policies to minimize risks and ensure the cloud environment remains secure and supports your business objectives.
- Understand the cost
- Perform a platform analysis
- Readiness assessment — This assessment will review your infrastructure, data management capabilities, and organizational alignment with digital goals to identify gaps in skills, technology, or processes.
- Current state analysis — This involves reviewing your existing IT infrastructure, systems, and processes to identify inefficiencies, outdated technologies, or pain points and establish a baseline to measure against future improvements.
- Solution selection — Your company will evaluate and select digital solutions and platforms that align with its business objectives and organizational goals based on the findings from the readiness assessment and current state analysis.
- Enterprise transformation — This involves implementing the selected digital solutions within your company to achieve organization-wide change. It includes adopting new technologies, reengineering your processes, and fostering a culture of innovation.
- Align with business goals
Before migrating to the cloud, it is vital to develop a cloud strategy. This strategy should include three pillars to achieve holistic success:
Organizations typically face inefficiency, ineffectiveness, and an insecure environment if any of these three critical pillars are missing from your strategy and plans.
It is imperative to follow known frameworks to effectively manage risks when migrating to the cloud. These frameworks should span across these three phases:
Cost is a crucial consideration for most organizations when moving to the cloud. However, it is important to keep in mind that cloud transitions are rarely cheaper than on-premises environments until your organization achieves optimization.
Additionally, a lift and shift strategy may seem appealing since it can be implemented rapidly. However, this strategy is not cost effective — and does not provide any business benefit.
Workload rationalization is key to balancing the costs of your transition to the cloud. Focus on maintaining the value of business-critical workloads to improve both costs and performance.
Each company is at a different place in its digital transformation journey — and your next step is as unique as your company. A platform analysis can help you understand where your company is and its next best steps on the path toward digital transformation. This involves performing the following:
An external advisor can provide guidance to help you avoid common pitfalls on your path towards cloud migration and ensure a successful transition.
It is crucial to align your business goals with your cloud migration planning to provide a prioritized list of workloads to target. For example, one of your business objectives might be to decrease your operational costs. Aligning this objective with your cloud migration may involve prioritizing the migration of high-cost legacy systems to the cloud to reduce costs and achieve your objectives.
Take the next steps
Moving to the cloud is crucial to prepare your platforms for the future of energy production. The cloud enables organizations to adapt quickly to change, scale to meet demand, and improve productivity. However, it is important to understand the risks that accompany a cloud migration and take the right steps to overcome obstacles on your path towards digital transformation.
For more information, contact a member of our Cloud Services team. No matter where you are in your cloud journey, we can help you accelerate along the maturity curve to optimize your return on investment.